Tariff Wars and Trade Deals With Costly Government
We study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of a costly government leads to lower non-cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump-sum taxes and transfers.
|Date of creation:||2000|
|Date of revision:||08 Jun 2000|
|Contact details of provider:|| Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada|
Web page: http://www.sfu.ca/economics.html
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|Order Information:|| Postal: Working Paper Coordinator, Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada|
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- Kennan, John & Riezman, Raymond, 1988.
"Do Big Countries Win Tariff Wars?,"
International Economic Review,
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"A Coalition-formation Approach to Equilibrium Federations and Trading Block s,"
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"Protection for Sale,"
162, Princeton, Woodrow Wilson School - Public and International Affairs.
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- de Melo, Jaime & Montenegro, Claudio & Panagariya, Arvind, 1992. "Regional integration, old and new," Policy Research Working Paper Series 985, The World Bank.
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